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401(k) Real Talk Transcript for April 3, 2024

Transcript of Episode 100 of 401(k) Real Talk.

Greetings and welcome to this week’s edition of 401k Real Talk. This is Fred Barstein contributing editor at’s RPA omnichannel and CEO at TRAU, TPSU & 401kTV - I review all of last week’s stories and select the most important and interesting ones providing open honest and candid discussion you will not get anyway else. So let’s get real! 


The big news was that flexPATH won its second lawsuit brought by the law firm of Jerome Schlichter in the Mills v. Molina case with similar issues about untested TDFs and high fees as the recently decided Woods case.

Though NFP, the plan’s advisor which recommended the flexPath TD, was dropped from the suit, the judge voiced concerns about conflicts of interest – the plan eventually fired NFP and flexPATH hiring SageView and Fidelity respectively.

Ultimately, because the flexPATH funds performed well v. their indices and there was an IPS in place using RPAG’s scoring system, the judge decided in favor of the defendants, even though the judge noted that the committee lacked expertise and engagement relying almost exclusively on their advisor.

The lawsuits likely caused NFP’s parent, Madison Dearborn, to separate flexPATH and RPAG last May perhaps knowing that they were planning to sell NFP. Coincidentally, Madison Dearborn bought the CIT division of Wilmington Trust from M&T Bank, now Great Gray which powers the flexPATH’s CITs, signally a major shift in strategy and a vote of confidence for the flexPATH and Great Gray businesses.


Looking to leverage the explosion of small 401k plans estimated by Cerulli to reach 1 m in 2029 due in part to state mandates and tax credits, Empower launched a new digital service for plans up to $1m with on demand proposals. The company claims that their “Ready Select” service will reduce complexity and cost. They recently announced a new retirement income platform.

Meanwhile, payroll companies and a select few banks like JP Morgan/Chase leveraging their relationships with existing clients have seen a surge in new plan growth and fintechs like Vestwell and Guideline are leveraging their superior technology, simplified processing and lower cost structure.

The Ready Select product is Empower’s attempt to compete in the micro/start up market against well positioned competitors which also include traditional record keepers like Fidelity, Schwab and Vanguard that have relationships with many wealth advisors.


Though there has been a bit of a lull in provider consolidation since Empower bought MassMutual and Prudential’s record keeping divisions and the Standard acquired Securian’s group, that may change with the recent announce that Ascensus will be buying Mutual of Omaha’s record keeper which includes 2300 plans and $3.9 bn. Ascensus has been providing back-office support to Mutual of Omaha which recently fired their DC sales force which was a clear signal.

Meanwhile, Ameritas, which had lost Forrest Wilson to Alerus recently saw their retirement head, Jim Kais, leave for Equitable all of which are obviously not good signs for the Midwest provider.

There are currently 43 national record keepers, soon to be 42, with only a handful at scale and a few other uniquely positioned leaving the rest to ponder whether to sell, buy or partner as the inevitable drum beat of record keeper consolidation continues.


The focus of the 401(k) industry has been on helping people save enough for retirement. But very little is discussed about how to prepare people emotionally to transition from a structured schedule with inherent social networks to what can be a daunting amorphous life in retirement - overnight.

The wealth management industry has been moving away from starting with a financial plan to better understanding a client’s need and personal situation and then forming a financial plan which evolves over time.

And while behavioral finance, which is the convergence of economics and psychology, has improved plan design and the accumulation phase of retirement, that dynamic has yet to be applied to helping people emotionally as they transition into retirement.

Read my recent column, “How people fail at Retirement” about how advisors can better position themselves to help clients emotionally prepare for their new life and loss of their social network and even their identities.


So those were the most important stories from the past week. I listed a few others I thought were worth reading covering:

Please let me know if I missed anything or if you would like to comment. Otherwise I look forward to speaking to you next week on 401k Real Talk.


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